Saudi Arabia, Russia agree to oil output ‘freeze’

Troubled-Oil

Feb 16, 2016 (LBO) – Saudi Arabia and Russia have agreed to ‘freeze’ crude oil output after talks in Qatar, fixing production at January levels.

Saudi Oil Minister Ali Al-Naimi and Russian Energy Minster Alexander Novak opted not to cut back production, with Qatar and Venezuela also agreeing to participate, Al-Naimi said.

Brent Crude was off an intra-day high of 35.45 dollars per barrel, ahead of the meeting between the world’s largest crude oil producers, trading at 34.14 dollars per barrel after the announcement.

Jasper Lawler, of CMC Markets, said: “The output freeze is disappointing because it’s not an outright cut and with Iran not a part of the meeting, it’s still a bit far-fetched to think this is a precursor to a future cut. Iran’s absence from the meeting means overall OPEC output should still rise.”

“A freeze would not create an immediate U-turn, but it creates a better foundation for the price recovery in the second half,” Olivier Jakob, managing director of consultant Petromatrix GmBh, said in a note to clients before the meeting concluded.